Lucy Guo On How She Became The World's Youngest Self Made Woman Billionaire

My dad was sending me angry emails for probably up to a year and it was landing in my spam inbox because they all look the same. You are so dumb. You don't have any risk calculation. How did I raise such a dumb daughter? You're dumb.

26 billion or so. Like if I didn't become a billionaire as a failure because everyone around me was so intelligent. It was very obvious that everyone around me was going to be a billionaire or was already a billionaire.

I would say

Thank you for being here.

Congratulations.

Yeah, honestly, it was a no-brainer. The second that I heard that I got the Thiel fellowship, I was like, "Fuck it. Why not, right?" It was $100,000 to drop out of school, which is already awesome, but I also didn't view as a risk because I already had job offers lined up and what's the worst case scenario? Like I fail and I go back to college. Like that's not that bad. Or I can take one of those job offers that I did have and they were pretty incredible job offers. So for me, I just felt like my learning was capped in college. Like I was learning more going to these hackathons than I was being in college. And I didn't want to waste any more time in college. I also knew like in my risk calculation that it would most likely open more doors for me because when you drop out, people just automatically assume that you are smarter than you are or that you're going to be a prodigy, right? So, they will want to meet you. They'll want to mentor you, etc. So it ended up being like one of the best decisions of my life. I dropped out and then I got to hang around some really cool kids.

Yeah, drop out of school. I do think that you should do like one to two years of college though because I do believe that there's no place in the world where you're going to be around people of similar intelligence levels that all want to make friends. Because even when you like you know go get your first new job like most people already have friends established and then you know it's obviously kind of hard to make friends in like high school, middle school because like people made friends in preschool already. So it is and also just intelligence levels are completely different in those situations.

Oh they got so mad at me. I remember so my dad was sending me angry emails for probably up to a year and it was landing in my spam inbox because they all look the same which is like you are so dumb. You don't have any risk calculation. How did I raise such a dumb daughter? You're dumb. Like it was all pretty much, you know, broken English, same thing. So Google marked it as spam. I also remember they, you know, cut off my phone, they cut off like health insurance, all that. Because they really like, and I get it, like they immigrated from China to America to give their kids a better future. And education is how they got a better future. And they really believe that education was the number one thing you could do to be able to like raise a future stable family, which is why all Asians are like, "Be a doctor, engineer, or lawyer because those are high paying jobs." So I was basically disrespecting them and through them they felt like all their sacrifices were for nothing when I dropped out. So obviously they weren't happy.

Yeah, that probably goes all the way back to second grade. So, my Asian parents realized that the best punishment was taking away my money. I would like hide them in the middle of Harry Potter books like cash and somehow they found them. I'm like, how did you find it? It's literally in the middle of a Harry Potter book. So, I one day discovered PayPal and I literally went to Home Depot, bought like a Visa debit card and then made a PayPal account and from there on there's like this whole like underground gaming world where people are you know selling like black hat items etc. So I basically learned to make bots on Neopets and I first started off like selling Neopoints, selling like rare pets, etc. and then trading up and then botting for like rare items. And then I started discovering and making websites. So, I made a bunch of different websites from like arcade game websites, like streaming websites. And I got addicted to like that feeling of creating products that people use. There was like an adrenaline rush where I'd be like, "Oh my god, there's like 10,000 people on this website right now." Mostly due to like stumble upon it wasn't like people who really actually find a website, but it was cool. It was a great feeling. So I think that was when I knew I like wanted to build a company. Maybe I didn't like fully know because when I was applying to college, I wanted to be a chemical engineer. Actually, my parents said no. But I also wanted to like like I then learned that if I applied for computer science it would actually give me the best chance at getting into college because everything I had done from like you know second grade was computer science technically. So yeah and then maybe like the next point I knew was just at hackathons where I again got addicted to building products.

Yeah, so I would say that it was all an accident. We didn't intend to be an AI company. We were literally actually we applied to Y Combinator with a healthcare app. The idea was that we would find the best doctors for certain procedures and there's a whole lot of reasons why that would have never worked. But we ended up pivoting into Scale and when we pivoted to Scale it was called Scale API. We wanted an API that would call doctors for us. So we thought we were going to take over the BPO industry, specifically call centers. But what ended up happening was, you know, we blasted every single YC founder and we're like, "Hey, we have an API for humans. What do you need humans to do?" And the number one thing that people kept on coming back to us for was data labeling. And then one of our investors was like, you know, with data labeling, you can actually use AI once you connect enough data and collect enough data. And we're like, oh, well, true. So we like rebranded from Scale API to Scale AI. And then we became like the picks and shovels of the AI industry. So we helped every single other AI company label data to make their models better because your models are only as good as the data that you provide it.

I would say it's been my entire success. We actually started off with ClassPass for clubbing which is another terrible idea but we need to pivot very quickly from that and I would say I generally make pivots like 3 weeks in because too many founders I think actually people in general they fall into sunk cost fallacy and it's really hard not to fall into sunk cost fallacy because like you've invested so many resources you just want to make the thing that you've invested resources in work but you like that's like the number one trap a founder can have. I think it's incredibly important to like just be real with yourself and be like this does not have the logarithmic scale that we needed to have. So, it's time to pivot.

Yeah. So, I would say the easiest way to describe it is that we help label data for other companies. So, in the self-driving car example, companies would give us like you know their images, their LiDAR data, etc. And then we would tell them like what's a stop sign, what's a pedestrian, what's a car on the road. And we did this for like all different sorts of tasks. And then my role initially I had built out like some of the API and then I was on product and I helped build out the operations team. So basically created this like automated process to hire the labelers and then literally hired all our labelers and trained them and helped scale that process.

Yeah, it was quite literally so early early on we because YC has so many large companies, we scraped YC internal database, which you're not supposed to do, but we did. And then we literally just blasted every single founder and we're like, "Hey, we're also YC company. We have this API for humans. Like what do you need it for?" And then we were able to get some of our first large customers that way. And then it was really just conferences. So, I would print out flyers and just leave them on the floor, on the table, etc. Basically pitching like, "Hey, we're going to be able to label your data cheaper than everyone else." So then people would actually contact us. We also obviously use LinkedIn and would figure out like who is like, you know, the VP of engineering, the CTO, maybe a head engineer that could ask the VP or CTO for budget to label data. And then we would manually label all the data ourselves to start. So, we did a pilot. It would be like, you know, boardroom where we gather everyone. We're like, "Okay, we're going to label the data, give them the perfect pilot, and then they're going to sign a larger contract, and then we're going to scale with them."

Yep. I think too many people ask for permission and yeah, there are a lot of companies that would not exist if you asked for permission. Like Uber is one example, right, where like they broke all the laws but they didn't ask for permission and now they became so ingrained in society that they kind of just had to exist.

I would say that when we got our first self-driving car customers scaling and we realized that every single automobile company needed data labeling we're like okay every automobile company is very well funded every AI company is very well funded and number one thing that every AI company needs especially automobile companies is data because they need to make sure like automobiles companies especially because people can't die on the road. So, we realize how much money there is to be spent, so we double down on this. And honestly, like pro tip to everyone here. Like one thing I've noticed in like today's age, if you want to invest in the public markets is like you should also invest in like I want to say the picks and shovels, but like you know the infrastructure for all AI companies exists. Like I'm making a lot of money on Nvidia like chips like pretty much everything that powers AI because everyone's building the AI company. So even though not every AI company will succeed, everyone's using resources.

Yeah, so I think with Y Combinator, I would suggest every single like B2B SaaS founder to apply to Y Combinator. The reason being that Y Combinator opens you up to thousands of customers immediately and there's just a like mutual camaraderie with YC founders where it's like if you're a YC founder I'll talk to you right because we just support the community and we give back. So it's a no-brainer for B2B SaaS founders. I think if you're like a consumer founder or you know like let's say your customer isn't SaaS companies it just becomes a question of like what you want like do you want that community? Do you want that mentorship or do you want to save your equity and raise at a higher valuation?

So, I think this goes back to really building a network, especially when you're younger. So, the initial talent that we attracted literally came from like college. Like I hit up the smartest engineers I knew at Carnegie Mellon, which thankfully was like the number one CS program, and they all decided like, yeah, like we'll come work with you. To the point where like some of them didn't ask for how much their equity was worth, which was very confusing to me. They were just like, yeah, like startup, you're building one, I'll come. Which was cool. And that was because of that like emotional connection that I had built with them over college. I would say outside of that, I like seeing people that take action on their own. So, for example, like people that attend hackathons, they're great because they're not just sitting in college doing the bare minimum, you know, completing their classes, etc. Like they're going out and finding competition to do like they're learning how to like take the theoretical knowledge they learn from college and apply it practically. So I really like kids as well. I think that competitive people in general are very successful at company building. So, this can be anything from, you know, like math competitions to being an athlete because it requires a level of discipline and hard work that exceeds I think the average person.

I mean, we've definitely had issues with data that we've given where we almost lost contracts, but and and I think that was always going to happen, but I think one thing we very quickly learned is everything is emotional retention. So, we literally sent champagne and a cake and everything was all good. And from then on, I really learned like how much sales and retention is all emotional connectivity.

It was pretty early on, I think. Like when I was trying to convince, you know, people to choose us over several different offers, I would have to talk to them every single day and I realized that like, you know, our offer wasn't as high, so I would have to really sell them. It got to the point where I was doing Barry's Bootcamp with them. I was like buying Pikachu presents for them. I think we also got taught this by our investors though, like they were telling us the Stripe founders would take people on plane rides, would like go on jog with them. Plane rides is a really cool way to pitch someone, I guess. And then, that was the way that they managed to convince people to work with them. So a mix of like intuition, a mix of just like seeing what other founders have done, which is also why it's so important to be surrounded with smart people because, when you're around people that have done it before, they can tell you like what worked and what didn't.

It was like 26 billion or so. For 49% but at a 49% at $26 billion valuation.

Yeah, I'm actually building a few new companies.

Yeah. So one of them we're working on infrastructure for the creator economy. So helping creators monetize their brand but we're also spinning it off into a fintech app. Because we realize that 80% of the money is through messaging but we're also seeing a lot of problems in other industries such as service industries or like with psychics etc. So we wanted to make the UX a little bit easier, and broaden our TAM. Another company I'm working on is an AI growth startup. I can't really speak more specifics to it, but it is going to be very fun. I think just like Agentic Tools to help you grow your company. And then I am working on an apparel company, but I can't speak more to that. There'll probably be announcements sometime this summer. That one I'm just excited about because I'm working on it with like two very close friends.

I think in general you should focus on one venture but the nice thing is I do have flexibility now so for example with the apparel company I hired a CEO in so I don't have to be day-to-day with it and focus too much on it. And for these other companies, I am doing something very similar, I'd say, where like I'm going to be very involved in the beginning, but then if I can find leadership to like place into these companies, I will. I think that like I'm kind of doing an Elon Musk approach there, I'd say.

So when I hire leaders I hire ICs because I don't believe in hiring a leader or manager and having to blow up teams. So everyone I look for can do the entire function themselves. And I also think that they hire better and are able to actually teach the future employees or like the future team how to actually do the function because it's very hard to be able to like determine whether your direct reports are doing a good job if you're not actually doing the job yourself. For example, like let's say you're a customer support lead. How do you actually know that your customer support team is answering tickets on time, answering them well, etc. Unless you know how to answer tickets. Like if you know how to answer tickets, you might be like, "Oh, this one should have been answered in 30 seconds. Why did it take three hours to

answer and why did you give it the wrong answer? So, I hire leaders into companies, but they're all ICs that wouldn't need to hire a team to do the function.